Specialty drug coverage varies between health plans’ medical and pharmacy benefit policies

BACKGROUND: In an effort to control drug spending, health plans are increasingly shifting specialty drugs from their medical benefit to the pharmacy benefit. One consequence of this trend is that some health plans have both a medical and a pharmacy coverage policy for the same drug. OBJECTIVE: To examine how frequently health plans issue medical and pharmacy benefit policies for the same specialty drug and to evaluate the concordance between plans’ medical and pharmacy policies when plans issue both policy types. METHODS: We identified specialty drug coverage policies from the Tufts Medical Center Specialty Drug Evidence and Coverage Database, which includes policies issued by 17 of the largest US commercial health plans. Policies were current as of August 2020. We determined plans that issued both medical and pharmacy policies. Next, we identified drugs with “medical-pharmacy policy pairs,” ie, drugs for which a plan issued both a medical and a pharmacy policy. For these pairs, we compared the plan’s policies while accounting for the following coverage criteria: patient subgroups (patients must meet certain clinical criteria), prescriber requirements (a specialist must prescribe the drug), and step therapy protocols (patients must first fail alternative treatments). We considered medical-pharmacy policy pairs to be discordant if coverage criteria differed, eg, the medical policy included a prescriber requirement but the pharmacy policy did not. RESULTS: Eight plans issued separate medical and pharmacy benefit coverage policies for the same specialty drug and indication. Among these 8 plans, we identified 1,619 medical-pharmacy policy pairs. Eighty-six percent of pairs were concordant (1,386/1,619), and 14% were discordant (233/1,619). Discordance was most often due to differences in plans’ application of step therapy protocols (184/233), followed by prescriber requirements (52/233) and patient subgroups (25/233). Forty pairs were discordant in multiple ways. Of discordant pairs, medical policies were more restrictive 41% (96/233) of the time; pharmacy policies were more restrictive 54% (125/233) of the time; 5% of the time (12/233), the medical policy was more restrictive in some ways, but the pharmacy policy was more restrictive in others. Overall, plans imposed coverage restrictions in their medical and pharmacy policies with similar frequencies. CONCLUSIONS: Commercial health plans’ medical and pharmacy coverage policies for the same specialty drugs tended to be concordant, although we found coverage criteria to be discordant 14% of the time. Medical and pharmacy policies that are inconsistent in their coverage criteria and restrictions complicate, and potentially hinder, patients’ access to specialty drugs.

medical and pharmacy policies. Next, we identified drugs with "medical-pharmacy policy pairs," ie, drugs for which a plan issued both a medical and a pharmacy policy. For these pairs, we compared the plan's policies while accounting for the following coverage criteria: patient subgroups (patients must meet certain clinical criteria), prescriber requirements (a specialist must prescribe the drug), and step therapy protocols (patients must first fail alternative treatments). We considered medical-pharmacy policy pairs to be discordant if coverage criteria differed, eg, the medical policy included a prescriber requirement but the pharmacy policy did not.

RESULTS:
Eight plans issued separate medical and pharmacy benefit coverage policies for the same specialty drug and indication. Among these 8 plans, we identified 1,619 medical-pharmacy policy pairs. Eighty-six percent of pairs were concordant (1,386/1,619), and 14% were discordant (233/1,619). Discordance was most often due to differences in plans' application of step therapy protocols (184/233), followed by prescriber requirements (52/233) and patient subgroups (25/233). Forty pairs were discordant in multiple ways. Of discordant pairs, medical policies were more restrictive 41% (96/233) of the time; pharmacy policies were more restrictive 54% (125/233) of the time; 5% of the time (12/233), the medical policy was more restrictive in some ways, but the pharmacy policy was more restrictive in others. Overall, plans imposed coverage restrictions in their medical and pharmacy policies with similar frequencies.
CONCLUSIONS: Commercial health plans' medical and pharmacy coverage policies for the same specialty drugs tended to be concordant, although we found coverage criteria to be discordant 14% of the time. Medical and pharmacy policies that are inconsistent in their coverage criteria and restrictions complicate, and potentially hinder, patients' access to specialty drugs.

Plain language summary
Health plans can cover drugs under their medical and/or pharmacy benefits. When plans have medical and pharmacy policies for the same drug, they are the same most of the time. However, 14% of the time, a plan's medical and pharmacy policies for the same drug are different, usually because of different treatments that patients must try before getting the drug. Inconsistent coverage policies may hinder patients' access to specialty drugs.

Implications for managed care pharmacy
Health plans are increasingly adjusting their benefit designs by shifting specialty drug coverage from their medical to pharmacy benefit. One consequence is that plans often issue separate medical and pharmacy coverage policies for the same drug. Our study found that plans' coverage criteria differ between their medical and pharmacy policies 14% of the time, potentially complicating patients' access to care.

DATA COLLECTION
The starting point for this research was the Tufts Medical Center Specialty Drug Evidence and Coverage (SPEC) Database, which characterizes specialty drug coverage decisions from 17 of the largest commercial health plans, as measured by market share. Included plans represent the majority of covered lives in the United States. 8 Data included in SPEC are extracted from health plans' publicly available coverage policies. The SPEC database includes information from plans' commercial lines of business (Medicaid or Medicare plan offerings are excluded). When the FDA has approved a drug for multiple indications, SPEC includes coverage information for each drug-indication. For example, because the FDA approved ustekinumab for psoriasis, psoriatic arthritis, and Crohn's disease, it features in SPEC 3 times. Coverage policies were current as of August 2020.

Analysis 1: Frequency With Which Plans Issue Medical and
Pharmacy Coverage Policies for the Same Drug. We calculated the proportion of all drug-indication pairs for which plans issued both a medical and pharmacy coverage policy for the same drug. A "drug-indication pair" refers to a specific drug covered by a plan to treat a specific condition. This study was restricted to coverage policies issued by payers that issue and clearly distinguish between medical and pharmacy benefit policies.
We reported proportions by plan, by disease category (cancer vs noncancer), and by FDA orphan drug designation.

Analysis 2: Concordance Between Medical and Pharmacy
Coverage Policies. A "medical-pharmacy policy pair" refers to corresponding medical benefit and pharmacy benefit coverage policies issued for the same drug-indication pair by each payer. Among all medical-pharmacy policy pairs, we calculated the proportion that were concordant. We classified a medical-pharmacy policy pair to be concordant if either (1) both were consistent with the FDA-approved indication or (2) both policies included the same UM criteria, ie, the same step therapy protocols, patient subgroup restrictions, and prescriber requirements. Otherwise, we designated the pair of medical benefit and pharmacy benefit coverage policies to be discordant (ie, if at least one was inconsistent with the FDA-approved indication or the policies did not include the same UM criteria). Furthermore, we reported discordant pairs as follows: (1) Medical policy more restrictive-eg, the medical policy included a UM criterion but the pharmacy policy did not; (2) Pharmacy policy more restrictive-eg, the pharmacy policy contained a UM criterion and the medical policy did not; and (3) Mixed medical/ pharmacy policy restrictiveness-ie, the medical policy is Health plans are increasingly attempting to control pharmaceutical spending by adjusting the benefit design of specialty drugs, ie, costly and complex medications that often require special handling, administration, and monitoring. 1 Conventionally, health plans covered specialty drugs, often administered by a physician in an infusion center or outpatient clinic, through the medical benefit, whereas other, self-administered drugs were covered through the pharmacy benefit. 2 Increasingly, plans are attempting to control specialty drug spending by changing how those drugs are distributed and reimbursed. For example, plans may shift coverage of specialty medications from the medical benefit to the pharmacy benefit. 3,4 As a consequence, plans may require that infused drugs be dispensed from a pharmacy prior to administration, through either "white bagging" (medication distribution from a pharmacy to the physician's office, hospital, or clinic for administration) or "brown bagging" (medication distribution from a pharmacy to a patient to bring to their physician for administration). 3,5,6 These strategies grant plans greater control over how their enrollees access and pay for medications. However, there is growing concern that the additional transport and handling associated with these practices can compromise access, safety, and quality. 4 The evolving complexity of the medical and pharmacy benefits issued by some plans has prompted them to issue medical and pharmacy benefit coverage policies for the same drug, potentially introducing inconsistencies in coverage between a health plan's medical and pharmacy benefit that could complicate patient access to care. 4 Research has found that specialty drug coverage policies vary across plans, with some plans more often imposing utilization management (UM) criteria, such as step therapy protocols, prescriber requirements, and quantity limits. 7,8 Other researchers found various factors to be associated with specialty drug coverage restrictiveness, such as the availability of alternative therapies, orphan drug status, and a drug's annual cost. 9 However, it is unknown whether plans cover drugs consistently across their medical and pharmacy benefits. [7][8][9] In this research, we examine how frequently plans issue medical and pharmacy benefit coverage policies for the same drug. Second, we examine the concordance between medical and pharmacy benefit policies that plans issue for the same drugs. Finally, we investigate how frequently either policy imposes greater restrictions on coverage (compared with the criteria implied by the US Food and Drug Administration [FDA] indication) when plans issue both medical and pharmacy benefit coverage policies for the same drug.
Of discordant pairs, pharmacy policies were more likely to be restrictive (54%) than medical policies (41%) ( Table 2). In 5% (12/233) of instances, the plan's medical policy was more restrictive than its pharmacy policy in one way, but the plan's pharmacy policy was more restrictive than its medical policy in another. For example, one plan's medical policy covered abatacept for rheumatoid arthritis as a fourth-line therapy and did not include a prescriber requirement; in contrast, the corresponding pharmacy policy covered abatacept as a third-line therapy and included a prescriber requirement.
Step Therapy Protocols.
Step therapy requirements differed among 7 plans' medical-pharmacy policy pairs (n = 184), with more restrictive than the pharmacy policy in some ways, but the pharmacy policy is more restrictive than the medical policy in other ways. For instance, if a medical policy included a prescriber requirement but not a step therapy protocol, and the pharmacy policy included a step therapy protocol but not a prescriber requirement, we categorized this pair as Mixed medical/pharmacy policy restrictiveness.

Analysis 3: Frequency With Which Plans Impose Coverage Restrictions in Medical vs Pharmacy Coverage Policies.
To describe how frequently plans impose coverage restrictions (compared with the FDA-approved indication) in medical vs pharmacy benefit coverage policies, we compared UM criteria among medical-pharmacy policy pairs. These include patient subgroups restrictions (requirement for patients to meet particular clinical criteria, eg, to be experiencing symptoms of particular severity or duration), step therapy protocols (requirement for patients to first try and fail an alternative drug or treatment), and prescriber requirements (requirement for a certain type of physician, eg, a rheumatologist, to prescribe a drug). We also reported restrictions by plan, by disease category (cancer vs noncancer), and by FDA orphan drug designation.

ANALYSIS 1: FREQUENCY WITH WHICH PLANS ISSUE PHARMACY AND MEDICAL COVERAGE POLICIES FOR THE SAME DRUG
Eight of 17 plans included in the SPEC database issued separate medical and pharmacy benefit coverage policies for the same specialty drug and indication and were included in our analyses. We excluded 6 plans because their coverage policies were not clearly distinguished as pertaining to either the plan's medical or pharmacy benefit; we excluded 3 plans because they issued only medical policies.
We identified 1,619 medical-pharmacy policy pairs issued by the 8 included plans. Plans varied widely with respect to the frequency that they issued both a medical and a pharmacy benefit policy for the same drug (Table 1). Plans issued separate medical and pharmacy coverage policies for 29% of cancer drug policies compared with 41% for noncancer drug policies. Thirty-two percent of all orphan drug coverage policies were issued as separate medical and pharmacy coverage policies compared with 39% of nonorphan drug coverage policies (Table 1). 10

Number of drug-indication pairs in SPEC database
Proportion of drug-indication pairs for which plans issued both medical and pharmacy policies, n (%)  TABLE 1 Prescriber Requirements. Prescriber requirements differed between medical and pharmacy policies for 3 plans (n = 52); in 56% (29/52) of these pairs, plans included a provider requirement in their pharmacy policy but not their medical policy (data not shown).For example, for tocilizumab for polyarticular juvenile idiopathic arthritis, one plan required that the drug be "prescribed by or in consultation with a rheumatologist" in their pharmacy policy, but did not include the same requirement in their medical policy.

ANALYSIS 3: FREQUENCY WITH WHICH PLANS IMPOSE COVERAGE RESTRICTIONS IN MEDICAL VS PHARMACY COVERAGE POLICIES
Among the 1,619 policy pairs, medical and pharmacy policies were equally likely to have no coverage restrictions (ie, were consistent with the FDA label; 53% for both benefit plan types) (Table 3). However, the frequency of no coverage restrictions in both medical and pharmacy policies varied across plans, ranging from 13% to 69%. A higher proportion of cancer and orphan drug policies did not contain coverage restrictions compared with noncancer and nonorphan drugs, although this did not vary between medical and pharmacy policies (Table 3). Health plans imposed UM criteria (ie, prescriber requirements, patient subgroup restrictions, and/or step therapy the difference in number of drugs patients were required to step through ranging from 1 to 8. Plans varied with respect to the frequency that their step therapy protocols differed (0% to 22% of the time; data not shown), as well as to the magnitude of that difference (Figure 1). For example, one plan required patients to try only 1 treatment (phototherapy or systemic therapy) before accessing ixekizumab for plaque psoriasis under the medical benefit, whereas the pharmacy benefit required patients to try 3 treatments (phototherapy or systemic therapy and 2 preferred biologics).

Patient Subgroup Restrictions.
Patient subgroup restrictions differed among 5 plans' medical-pharmacy policy pairs (n = 25); in 58% (14/25) of pairs, plans included a patient subgroup restriction in their pharmacy policy but not their medical policy (data not shown). For example, for certolizumab pegol for plaque psoriasis, one plan required that the patient have at least 10% of their body surface area affected, or be experiencing significant functional disability, in their medical policy but did not include the same requirement in their pharmacy policy. In another example, for belimumab for lupus, one plan required that the patient have a score of greater than 6 on the Safety of Estrogens in Lupus Erythematosus National Assessment modification on the SLE Disease Activity Index but did not include the same requirement in their pharmacy policy. steer enrollees toward the pharmacy benefit in which drugs are adjudicated at the point of service, compared with the medical benefit in which lags in adjudication may occur. Second, differences may reflect management of pharmacy and medical benefit policies by different entities. For example, the plan might manage the medical benefit while a pharmacy benefits manager (PBM) might manage the pharmacy benefit. Third, issuing separate medical and pharmacy coverage policies may afford plans more flexibility; eg, they might cover an infused medication as a pharmacy benefit so that they can use management tools, such as tiered formularies available only in the context of pharmacy benefit coverage. Fourth, at the time we conducted our analysis, some plans may have maintained coverage policies under both their medical and pharmacy benefit programs as a temporary measure while transitioning coverage from one category to the other. Finally, plans may issue separate policies for different formulations of the same drug. For example, the pharmacy benefit may cover subcutaneous formulations for at-home administration, protocols) in similar frequencies between their medical and pharmacy coverage policies (Table 3). Similarly, cancer indications and orphan drug designation did not seem to affect the frequency of imposing UM criteria between medical and pharmacy policies (Table 3).

Discussion
We examined how frequently 17 large US health plans issued medical and pharmacy benefit coverage policies for the same drugs and found that 8 plans did so at least some of the time, although the frequency varied across plans. Some plans imposed UM criteria in their policies more often than other plans did. On average, approximately half of both pharmacy and medical coverage policies limited coverage relative to the FDA-approved (label) indication. Plans may issue separate medical and pharmacy policies for various reasons. First, differences may serve to incentivize their enrollees to acquire care using one or the other category of benefits. For example, plans may  Step therapy protocol  TABLE 3 whereas the medical benefit may cover the intravenous (IV) formulation for administration in a clinical setting. Vertical integration may in part explain differences between medical and pharmacy benefit policies. Integration of the payer, PBM, specialty pharmacy, and provider services allows health plans to exert greater control over pharmacy care and dispensing, eg, by requiring enrollees to obtain physician-administered specialty drugs through a third-party pharmacy. 4 By adjusting their benefit structures in this way, health plans can exert greater control over how their enrollees obtain drugs, allowing them to potentially reduce costs through negotiation of drug prices and dispensing rates. Future research should evaluate whether vertical integration affects discordance between medical and pharmacy benefit policies.

Frequency With Which Plans Impose Coverage Restrictions in Medical and Pharmacy Coverage Policies
Some plans issued medical and pharmacy policies only for drugs with multiple formulations. For example, several plans issued medical benefit coverage policies for the IV formulations of abatacept, golimumab, and ustekinumab and pharmacy benefit policies for the subcutaneous formulations for the same drugs. We found coverage criteria often differed between formulations. For example, one plan covered the subcutaneous form of ustekinumab only for patients who had first tried and failed 4 conventional therapy options; the same plan required patients to first try and fail only adalimumab and tofacitinib before gaining access to the IV form. In most cases, formulation type did not explain the issuance of separate medical and pharmacy benefit policies for the same drug, as drugs with multiple formulations made up only 5% of medical and pharmacy benefit policy pairs. Adjustment of benefit structures by plans has raised concerns about compromised safety, quality, and access. 6,11 For example, requiring that patients obtain a drug from a third-party pharmacy introduces the risk of shipping delays and delivery errors. 4 Requiring patients to store and transport medications that may require special handling introduces further risks. 6 Because drugs dispensed from third-party pharmacies are typically patient specific (eg, having a dosage tailored to the patient's weight), drugs not received by the intended patient may be wasted. 3,11 The shifting of drugs between benefit categories may also have implications for patient cost-sharing and influence where they receive care. 6

DISCLOSURES
Drs Kauf, O'Sullivan, and Strand were employees of Alkermes, Inc., when the study was conducted and may own stock in the company. Mx Levine, Mr Panzer, and Dr Chambers have no conflicts of interest to disclose. This research study was supported by Alkermes, Inc.
More research should be conducted to inform questions about the impact on patient access of issuing both medical and pharmacy policies for the same drugs. Future research should examine the impact of issuing separate policies on drug utilization, patient out-of-pocket payments, and health outcomes. Research should also examine the impact of different benefit structures on the total cost of care.

LIMITATIONS
This study has several limitations. First, we relied on publicly available plan coverage policies. Plans may also have confidential coverage policies. Second, the included plans may not be representative of all US commercial health care payers, although the plans covered represent more than 50% of the US population aged younger than 65 years. Third, the SPEC database does not capture all aspects of patient access, eg, site of care restrictions or patient out-of-pocket costs, which are generally unavailable from plans' coverage policies. Finally, our findings may not generalize to public health plans, including Medicare and Medicaid.

Conclusions
Eight of the 17 large US commercial health plans in this study issued both medical and pharmacy policies for the same drug in some cases. The majority of medical and pharmacy polices were concordant; however, plan coverage criteria differed between the medical and pharmacy policy 14% of the time, most often due to conflicting step therapy requirements. Within-plan differences in medical and pharmacy benefit policies may complicate patient access to specialty drugs.